Buying Property in Hua Hin (and Elsewhere in Thailand)
Hua Hin is a paradise for many, but that doesn't mean one gets to buy a piece of it.
Update: A historical overview of land ownership laws in Thailand from the Bangkok Post
In recent years, and to some extent spurned by the property bubbles elsewhere and the cash they generated, an increasing number of foreigners have looked into buying property in Hua Hin and other tourist resorts in Thailand.
Hua Hin is plastered with billboards advertising the bliss of living in beachfront villas with infinity edge pools. And who doesn't want to own their own piece of paradise, at prices that developed countries have left behind a generation ago?
There are significant downsides to this dream for many many buyers. First and foremost, Thailand is a friendly and welcoming country, but Thais have no intention whatsoever to cede even a square foot of their land to foreigners. This policy entails manifold risks for the foreign property buyer: He is led into less than favourable "work-arounds" meant to give him quasi-ownership of the property. This in turn leads to increased government scrutiny and possible hardship arising from this in a foreign and alien jurisdiction, with foreigners buying pieces of Thailand not enjoying a favourable standing with the authorities and the courts of the land should anything go awry.
In recent years (decades!) several ownership models were peddled to foreign buyers by property developers in Thailand. The most straightforward was the "company route", with the foreigner setting up a Thai limited company with nominee Thai partners who then owned the land as nominees. This model is now viewed infavourably by the Thai authorities and the Thai partners now have to be "genuine", i.e. have a real monetary in the company from their own pockets. Nominees Thai shareholders, a practice that would be perfectly normal and legal in the West, are positively not recommended as they make the foreign owner vulnerable to government scrutiny, which can get very unpleasant.
The more recent model is the "extensible 30-year lease", where a lien is registered with the land office. This is fully legal, but personally I don't see the point of effectively paying rent for 30 years in advance, and at prices that are equivalent to freehold ownership for the entire time period.
What about condos? Foreigners can own 49% of the area space of any condo project under a number of regulations, most importantly that funds have to brought in from abroad in their entirety. This is real free-hold ownership, but the majority of the owner's board will always be Thai and in certain cases in the past the majority owners imposed regulations and minutes which were considered unfair by the foreign owners, who had no recourse whatsoever.
With the weak legal redress for foreigners in the Thai judicial system, condo ownership can turn out to be an unwise investment. And its nature as an investment is itself doubtful since condominium prices have tended not to rise and rather decline in the past because of a general oversupply of projects.
Conclusion: It's generally preferable to just rent properties in Thailand and leave it at that. Rental costs are a small fraction of those required in developed countries, and building quality and facilities are usually adequate. Most importantly, it's easy to just move out when the property doesn't meet your needs. Properties don't last very long in the tropics without significant repairs, and this can lead to sometimes rapid deterioration of the property. The flexibility of just walking away should be preferred over the hardships an "investment" in elusive "freehold" ownership can bring to foreigners in Thailand.
If you decide to take the plunge, keep in mind despite its shiny facade, excellent infrastructure and friendly people, Thailand cannot be compared to a developed democracy in terms of the rule of law and government effectiveness. The Thai people suffer from this, and as a foreigner you might face insurmountable obstacles should problems arise.
Recently there were two major cases involving foreigners who had bought property in Hua Hin from (foreign) property "developers" and "agents", investigated by resident journalist Andrew Drummond:
The first case shows that things got rolling only after personal intervention by the prime minister of Thailand, but inspite of this intervention the defendants are out on bail and likely will remain free for years to come.
And two more recent (August 2010) posts from Andrew Drummond: